As my husband remarked, you have to wonder if the Fed took into account what would happen when "retirees" found the return on their retirement savings had gone to zero? It might have guessed that they'd go back to work. It turns out that they're still pretty
competitive:
The further one digs into today's "blockbuster" jobs report, the uglier it gets. Because it is not only the participation rate collapse, the slide in average earnings, but, topping it all off, we just learned that the future of the US workforce is bleak. In fact, with the age of the median employed male now in their mid-40's, the US workforce has never been older. Case in point: the September data confimed that the whopping surge in jobs... was thanks to your "grandparents" those in the 55-69 age group, which comprised the vast majority of the job additions in the month, at a whopping 230K.This was the biggest monthly jobs increase in the 55 and over age group since February!
What about the prime worker demographic, those aged 25-54 and whose work output is supposed to propel the US economy forward? They lost 10,000 jobs.
Some thought-provoking charts at that link. Will Affordable-Healthcare-for-All have to kill off Gramma and Grampa before employers break down and hire the youngsters? And have you checked out the
voting patterns among the Grizzled Grumblers?
So America is now like a labor union: seniority rules?
ReplyDeleteAlmost exactly the same, with this subtle difference: in a union, seniority is forced on unwilling employers regardless of who they think will make the best workers. In the phenomenon reflected in these statistics, older workers out-compete the younger workers by convincing employers to hire them willingly even though employers are totally free to hire younger workers. Otherwise, a similar system.
ReplyDeleteI imagine it's a great deal for employers. They can pay less because many of those workers are subsidized by Social Security and Medicare... paid for by the younger workers, who would need higher wages as they (a) lack the subsidy, and (b) have to pay huge FICA taxes to subsidize the workers with whom they're in "competition."
ReplyDeleteYeah, that's probably all they have to offer.
ReplyDeleteIt doesn't matter, does it? Assuming they can both do the job but one (being subsidized by the other) will do it for less, that's a sufficient reason to prefer the cheaper one as an employer.
ReplyDeleteUnless the younger workers are unqualified for the job, of course. But my understanding is that all job creation since the Great Depression II got started has been part time, which is not usually where you find skilled labor at work. Fewer than half of Americans are working full time now.
So yeah: maybe they have great skills to go with their long years of experience. But they're also a subsidized workforce. Just like the preference for immigrants (both illegal and H-1B), wage depression is what it's about.
If subsidies equal wage depression, maybe we should re-think subsidies. By subsidies, we mean government benefits, right?
ReplyDeleteThe government wouldn't be the government without serfs to oppress and smash every once in awhile. It's entertainment for the Ruling Class.
ReplyDeleteOh btw, remember when I said Hussein O gets a big phat smile on his face whenever American dies or gets tortured?
In this case, Tex, that's right. Social Security and Medicare are a kind of reverse Robin Hood scheme: Take from the poor, and give to the rich. That was true even in 1984, but it's a lot more true today.
ReplyDeleteSo whenever workers get government benefits, we're effectively depressing the wages of all the other workers.
ReplyDeleteThat's been my argument to you about the minimum wage for years -- the thing that makes it necessary is the existence of welfare. Otherwise, you get wage depression in just this way. The way I normally explain that is that corporations are pushing their costs off on taxpayers, but it's the same point: here corporations are pushing their costs off on the people who pay FICA taxes.
ReplyDeleteThis version of it is particularly unsustainable, of course: they're keeping the people who would pay FICA taxes from working, in favor of those who are receiving benefits out of those taxes. It's incredibly destructive to the good of the nation.
ReplyDeleteGovernment benefits depress wages, which requires us to institute a minimum wage, which causes jobs to be lost. It sounds like a pretty good idea.
ReplyDeleteNo part of it is a good idea. But Social Security and Medicare are the two most popular programs the government runs -- they're never going away while the government retains the capacity to spend any money at all. Those old voters may vote conservative, but only insofar as the conservatives don't touch their payments.
ReplyDeleteLikewise corporations: some of them vote conservative, and donate conservative, but only insofar as the Republicans stick to some form of "comprehensive immigration reform" that will allow them to continue on the road of wage depression.
I'm not understanding you. You do or don't approve of government benefits for workers?
ReplyDeleteIf it were up to me, I'd be happy to eliminate Social Security and Medicare (really, all government participation in health care possibly even including the VA -- although in the latter case I would arrange generous funding for superior private health care for veterans). But it isn't up to me. There's nothing whatsoever I can do to undo those programs.
ReplyDeleteSo we operate in a reality in which they are a more-or-less permanent feature. We have to work around that.
Now it wouldn't be a very big problem for the markets if the economy were in a better condition, as people at this age want to retire and not "compete" with younger workers for part-time jobs at Walmart. But the Fed's policies have driven them into the market because their retirement savings are not sufficient to keep them out.
(Nor are the government programs -- I suppose one way out of the problem would be to buy them out of the market with even higher benefits; but I don't support taking from the poor to give to the rich as a general thing. Support for the 11% of the elderly in poverty is one thing; a generalized transfer of wealth from the young-and-poor to the richest part of our society makes no sense at all.)
So the young we need to pay for their programs aren't earning money to pay taxes, nor developing the skills to get better jobs; nor are better jobs available, because the ACA has killed everything except part-time work under 24 hours a week; the old are taking jobs they don't want because their savings aren't helping and they'd otherwise have to burn principle; and wages for everyone are depressed, as are benefits (since only part time jobs are being created).
Nobody's winning, except the companies who are getting cheaper labor. Even the government isn't coming out ahead, because it's not getting the FICA revenues it needs to pay out the benefits for this huge generation of retirees coming up. Indeed, we're eating the seed corn: keeping the young out of the market not only stops them earning and paying taxes now, it makes them less valuable as prospective taxpayers over their whole lifetimes because they'll be less skilled and experienced.
It's a massive disaster.
If you could convince more people that government benefits depress wages and cost jobs, you might get them to quit voting for welfare.
ReplyDeleteI have other reasons for opposing them, but I don't mind making common cause when it comes to voting. Get enough people to start voting against them, and they'll stop being inevitable.
It sounds like a pretty good idea.
ReplyDeleteSounds like the Left. I mentioned the ourobos before.
Social Sec isn't the reverse Robin hood. It's more like an upside down pyramid where the current generations pays for the previous generation. Except there's a gap. And then there's the fact that social security is merely a money laundering scheme for the government to take funds from and fund things they couldn't fund normally, and then promise they'll print more money later to pay off the depleted chest box. Which is empty now.
Most of that money went into Democrat projects for locals or special customers. The effect that had on the war scape was phenomenal. There was a clear quantitative and qualitative difference in training and materials used in the war.
Nobody's winning, except the companies who are getting cheaper labor.
For now, but that's merely to compete in a market artificially controlled by the gov. The gov is the one that benefits the most because gov unions still get theirs first. And getting theirs first, is what matters. Not about whether any generation gets left with the check.